sabana shari’ah compliant industrial...

Sabana Shari’ah Compliant Industrial REIT2Q 2013 Results Presentation

17 July 2013

This presentation shall be read in conjunction with the financial information of Sabana Shari’ahCompliant Industrial Real Estate Investment Trust (“Sabana REIT” or the “Trust”) for the quarterfrom 1 April 2013 to 30 June 2013.

This presentation may contain forward‐looking statements that involve risks and uncertainties. Actualfuture performance, outcomes and results may differ materially from those expressed in forward‐looking statements as a result of a number of risks, uncertainties and assumptions.

Representative examples of these factors include (without limitation) general industry and economicconditions, interest rate trends, cost of capital and capital availability, competition from similardevelopments, shifts in expected levels of property rental income, changes in operating expenses,including employee wages, benefits and training, property expenses and governmental and publicpolicy changes and the continued availability of financing in the amounts and the terms necessary tosupport future business. You are cautioned not to place undue reliance on these forward lookingstatements, which are based on current view of management on future events.

Any discrepancies in the tables included in this presentation between the listed amounts and totalthereof are due to rounding.

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Disclaimers

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II. Financial performance III. Capital management

I. Key highlights

IV. Asset management

V Outlook

Contents

VI. Corporate social responsibility

VII. Distribution details

Key highlights

SABANA REIT CONTINUES TO DELIVER STEADY GROWTH IN 2Q 2013

• Gross revenue in 2Q 2013 grew by 5.9% y-o-y to S$21.6 million, compared to S$20.3million in 2Q 2012.

• Distributable income in 2Q 2013 increased by 7.5% to S$15.6 million from S$14.5million in the same period a year ago.

• 2Q 2013 Distribution per unit (“DPU”) was at 2.40 Singapore cents, versus 2.27Singapore cents in 2Q 2012.

SOLID OCCUPANCY RATE

• Achieved 100% occupancy as at 30 June 2013.

UPDATES ON 2013 LEASE EXPIRY

• Sabana REIT is expected to successfully renew at least one master lease on 25November 2013.

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1

1.05

1.1

1.15

1.2

1.25

1.3

1.35

1.4

Jan Feb Mar Apr May ‐ Jun

(1) Based on daily closing prices for the financial period from 1 January 2013 to 30 June 2013. Source: ShareInvestor.(2) Record high closing unit price as at 22 and 23 April 2013.

Unit price performance in 2Q 2013(1)

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S$

S$1.38(2)

Stable and attractive yield

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(1) Based on Sabana REIT’s closing price of S$1.155 as at 28 June 2013 and Annualized DPU for the period from 1 April 2013 to 30 June 2013.(2) Source: “S-REIT Table”. OCBC Investment Research. 1 July 2013.(3) Prevailing CPF Ordinary Account interest rate for the period from 1 April 2013 to 30 June 2013. “http://mycpf.cpf.gov.sg/CPF/News/News-Release/N_18Feb2013.htm”. Central

Provident Fund Board. Web. 8 July 2013.(4) MAS data as at 28 June 2013. https://secure.sgs.gov.sg/fdanet/SgsBenchmarkIssuePrices.aspx”. Monetary Authority of Singapore. Web. 8 July 2013.(5) Refer to average rates compiled from that quoted by 10 leading banks and finance companies as at March 2013.

https://secure.mas.gov.sg/msb/InterestRatesOfBanksAndFinanceCompanies.aspx”. Monetary Authority of Singapore. Web. 8 July 2013.

Sabana REIT's 2Q2013 Annualised

Yield

S‐REIT ForwardYield

CPF OrdinaryAccount

Singapore Govt10‐year Bond

Banks 12‐MonthFixed Deposits

8.3%

6.6%

2.5% 2.5%

0.3%

(1)

(2) (3) (4) (5)

Yield pe

r ann

um

2Q 2013 performance improves y‐o‐y

(1) DPU and annualised DPU for the period from 1 April 2013 to 30 June 2013 are based on the actual number of units in issue and to be issued of 649,704,185 as at 30 June2013.

(2) Based on the last traded price of S$1.210 per unit as at 16 July 2013.

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(in S$'000) 2Q 2013 2Q 2012 Variance(%)

Gross revenue 21,554 20,346 5.9

Net property income (NPI) 20,229 19,075 6.0

Income available for distribution 15,590 14,501 7.5

Distribution per unit (DPU) (in cents)(1) 2.40 2.27 5.7

Annualised DPU (in cents) 9.63 9.13 5.5

Annualised distribution yield(2) 7.96% 7.55% 5.4

For the quarter ended 30 June 2013

Financial performance

• Gross revenue for 2Q 2013 increased by5.9% mainly due to contribution from 23Serangoon North Avenue 5, which wasacquired on 1 October 2012. NPI grew by6.0% due to the same reason.

• Property expenses were 4.2% higherthan 2Q 2012 due to property and leasemanagement fees for 23 Serangoon NorthAvenue 5, as well as higher property taxand maintenance expenses incurred for 9Tai Seng Drive.

• Net finance costs were 21.1% higherthan 2Q 2012 mainly due to amortisationof upfront fees and profit expenserelating to the Convertible Sukuk issued in3Q 2012.

• Donation of non‐Shari’ah income was23.1% lower mainly due to lower penaltycharged for late payment of rental bylessees.

• Other Trust expenses increased by59.8% mainly due to the establishment ofa S$500 million Multicurrency TrustCertificates Issuance Programme in 2Q2013.

NM denotes “not meaningful”.

(1) Comprise the portion of management fees paid in Units, donation of non-Shari’ah compliant income, amortisation ofcapitalised transaction costs incurred on the CMF and Convertible Sukuk, straight-lining adjustments on rental income foraccounting purposes, amortisation of intangible assets, Trustee’s fees, net change in fair value of financial derivatives,loss on conversion of Convertible Sukuk, and other income/expenses which are non-deductible/chargeable for taxpurposes.

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For the quarter ended 30 June 2013

(in S$'000) 2Q 2013 2Q 2012 Variance(%)

Gross revenue 21,554 20,346 5.9 Property expenses (1,325) (1,271) (4.2)NPI 20,229 19,075 6.0 Net finance costs (4,806) (3,967) (21.1)Amortisation of intangible assets (370) (366) (1.1)Manager's fees (1,434) (1,339) (7.1)Trustee's fees (122) (107) (14.0)Donation of non‐Shari'ah compliant income (30) (39) 23.1Other trust expenses (804) (503) (59.8)Loss on conversion of Convertible Sukuk (1,228) ‐ NMNet income 11,435 12,754 (10.3)Net change in fair value of financial derivatives 4,088 193 NMDistribution adjustments(1) 67 1,554 (95.7)Income available for distribution 15,590 14,501 7.5

Balance sheet

(1) Comprises 648,711,000 units in issue as at 30 June 2013 and 993,185 units to be issued to the Manager by 31 July 2013 as partial consideration of Manager’s feesincurred for the period from 1 April 2013 to 30 June 2013.

(2) Excludes distributable income of S$15.6 million available for distribution for the quarter ended 30 June 2013.

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As at 30 June 2013 S$'000

Investment properties 1,130,943

Intangible assets 2,547

Other assets 17,089

Total assets 1,150,579

Debt, at amortised cost 415,243

Other liabilities 28,196

Total liabilities 443,439

Net assets attributable to Unitholders 707,140

Units in issue(1) 649,704,185

NAV per unit (S$) 1.09

Adjusted NAV per unit(2) (S$) 1.06

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I. Key highlights


V. Outlook

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Capital structure at a glance

(1) Ratio of total borrowings and deferred payment over deposited property as defined in the Property Funds Appendix of the Code on Collective Investment Schemes.(2) Inclusive of amortisation of transaction costs.(3) Ratio of Net Property Income over profit expense (excluding amortisation and other fees) for the period from 1 April 2013 to 30 June 2013.

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As at 30 June 2013

Borrowings S$425.3 million

Aggregate leverage(1) 37.1%

Average all‐in financing cost(2) 4.3%

Outstanding Term CMF S$352.8 million

Convertible Sukuk due 2017 S$72.5 million

Weighted average tenor of debt 2.7 years

Interest cover(3) 5.1 times

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I. Key highlights


V. Outlook

Contents



Quality portfolio strategically located

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Properties are located in high‐tech industrial and logistic hubs across Singapore, in close proximity to expressways and public transportation

High occupancy rates

(1) Weighted by gross revenue (master leases of 20 properties of which 5 are due for expiry in November 2013).(2) Weighted by GFA.

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As at 30 June 2013

Total portfolio GFA 4,158,180 sq ft

Portfolio occupancy

20 properties (18 triple net & 2 single net master leases) 100.0%

1 property, multi‐tenanted (9 Tai Seng Drive) 100.0%

Weighted average lease term to expiry(1) 1.7 years

Weighted average unexpired lease term for the underlying land(2) 38.8 years

Asset Breakdown by GFA for 2Q 2013(1) Gross Revenue by Asset Type for 2Q 2013(1)

Diverse asset types

Sabana REIT’s portfolio is diversified in the following asset types:

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High‐tech Industrial42.4%

Warehouse & Logistics32.3%

General Industrial15.2%

Chemical Warehouse &

Logistics10.1%

(1) As at 30 June 2013.

High‐tech Industrial 56.3%

Warehouse & Logistics22.4%

General Industrial10.7%

Chemical Warehouse &

Logistics 10.6%

• High‐tech Industrial• Chemical Warehouse & Logistics

• Warehouse & Logistics• General Industrial

Long weighted average leasehold for underlying land

(1) As at 30 June 2013, weighted by GFA.

Well distributed, long underlying land leases, with an average of 38.8 years by GFA.

Percentage of unexpired land lease term by GFA(1)

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10.0%7.0%

‐

17.2%

55.8%

5.7% 4.3%

2032 ‐ 2036 2037 ‐ 2041 2042 ‐2046 2047 ‐2051 2052 ‐ 2056 2057‐ 2061 Beyond 2061

Weighted average master lease duration

Lease Expiry Profile by Gross Revenue(1)

Weighted average lease term to expiry of 1.7 years provides income stability.

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44.7%

8.7%

39.9%

3.0% 3.7%

2013 2014 2015 2016 Beyond 2016

(1) As at 30 June 2013, weighted by gross revenue.

Quality assets attract quality tenants

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(1) Weighted by sub-tenancy gross rent.

As at30 June 2013

As at31 March 2013

Total net lettable area (“NLA”) (sq ft) 3,305,293 3,305,293

Total number of sub‐tenants 145 147

Weighted average lease term to expiry (mths)(1) 25.6 26.1

Sub‐tenants’ Industry Diversification by NLA(1):

Diverse sub‐tenant base

No concentration in any single trade sector

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(1) As at 30 June 2013.

Logistics15.9%

Info Technology12.5%

Others11.9%

Telecommunication & Data Warehousing

13.9%

Electronics13.9%

General Manufacturing Industries

2.1%

Chemical7.5%

Construction & Utilities3.8%

Storage6.6%

Engineering4.7%

F&B2.8%

R&D1.6%

Healthcare2.8%

Active lease management

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As at 30 June 2013

Five master leases expiring on 25 November 2013 (approximately 4.9 months away):

At least one master lease to be renewed while negotiations on the remaining four master leases are still on‐going.

In the event that the remaining four master leases are not renewed, the buildings will beconverted into multi‐tenanted.

• Sabana REIT will take over existing sub‐tenancies on 25 November 2013.

• The net balance of NLA available for lease on 25 November 2013 is approximately 240,635 sq ft (or 7.3% of total portfolio).

Strong recovery in industrial property market

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0

20

40

60

80

100

120

140

160

180

200

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2008 2009 2010 2011 2012 2013

Price Index Rental Index

(1) Based on Urban Redevelopment Authority’s quarterly real estate statistics

Industrial Sector's Price & Rental Index (2008 ‐ 2013)(1)

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I. Key highlights


V. Outlook

Contents



Outlook

Capital values and rents likely to be fairly stable• Price growth of first and upper‐storey conventional industrial space continued to grow at a slowerrate q‐o‐q in 2Q 2013, while rents held steady, according to DTZ.(2)

• Meanwhile, Colliers International is of the view that industrial rents are expected to stabilize forthe rest of the year amid a fragile economic outlook and ample supply for tenants.(3)

Industrial Property Sector

Singapore’s GDP improved in 2Q 2013• According to advance estimates released by the Ministry of Trade & Industry (“MTI”), theSingapore economy grew by 15.2% on a q‐o‐q seasonally adjusted annualised basis, faster thanthe 1.8% growth in the previous quarter.(1)

• MTI is maintaining its 2013 economic growth forecast at 1% to 3%.

Singapore Economy

Positive outlook for 2013• Despite the subdued outlook for the global economy and the Singapore industrial propertymarket, the Manager remains positive about the Trust’s performance.

The Trust

Sources:(1) “Singapore’s GDP Growth Improved in the Second Quarter of 2013”. www.mti.gov.sg. Ministry of Trade and Industry. 12 July 2013. Web. 12 July 2013.(2) “Growth of industrial capital values continue to decelerate as rents hold firm”. www.dtz.com/Singapore. DTZ. 24 June 2013. Web. 9 July 2013.(3) “Stable year for industrial rents: Colliers”. The Business Times, 11 July 2013.

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Corporate social responsibility

Sabana REIT continues to support local communities by donating its non-Shari’ah incometo charities. The following organisations were chosen to benefit from its 2Q 2013 non-Shari’ah income:

Organisation: Lions Befrienders Service Association (Singapore) (“LBSA”)

Purpose: LBSA is a voluntary welfare organisation that helps support the social,psycho-emotional and physical well-being of the lonely seniors in Singaporethrough community participation. The Trust will be donating 3,000 T-shirts,worth a total of S$15,000 to senior beneficiaries of LBSA. The intention is tocreate a sense of belonging for the senior beneficiaries - that they are no longerforgotten but are remembered and worth caring for by LBSA.

The total amount of S$30,156 allocated to the organisations above represents less than 0.2% of Sabana REIT’s 2Q 2013 gross revenue.

Organisation: Ananias Centre

Purpose: Ananias Centre provides before and after school care to 240 studentsacross three centres in Singapore. Sabana REIT will be donating S$15,156 toAnanias Centre to help needy families which may not meet the stringent criteriafor government subsidies for student care, such as those supported by only oneworking spouse. The donations will also be used to sponsor enrolment fees forneedy families awaiting approvals for the subsidies.

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I. Key highlights for 1Q 2013


V. Outlook

Contents



Distribution details

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Stock counter Distribution period DPU (cents)

SABANA REIT Code: M1GU 1 April 2013 to 30 June 2013 2.40

Distribution Timetable

Ex-date 23 July 2013, 9am

Books closure date 25 July 2013, 5pm

Distribution payment date 29 August 2013

Donations to approved charities 29 August 2013 or earlier

Sabana Real Estate Investment Management Pte. Ltd.151 Lorong Chuan#02-03 New Tech ParkSingapore 556741

www.sabana-reit.com

Tel: +65 6580 7750Fax: +65 6280 4700

For enquires, please contact:

Mr Bobby TayChief Strategy Officer & Head of Investor RelationsTel: +65 6580 7750Email: [email protected]

Ms Grace ChenManager, Investor RelationsTel: +65 6580 7857Email: [email protected]

Thank you!

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Important Notice

This presentation is for information only and does not constitute an offer, invitation or solicitation of securitiesin Singapore or any other jurisdiction nor should it or any part of it form the basis of, or be relied upon inconnection with, any contract or commitment whatsoever.

The value of the Units and the income derived from them may fall as well as rise. Units are not obligations of,deposits in, or guaranteed by, the Manager, HSBC Institutional Trust Services (Singapore) Limited, as trusteeof Sabana REIT, Freight Links Express Holdings Limited, the Joint Bookrunners or any of their respectiveaffiliates.

An investment in the Units is subject to investment risks, including the possible loss of the principal amountinvested. Investors have no right to request that the Manager redeem or purchase their Units while the Unitsare listed. It is intended that Unitholders may only deal in their Units through trading on the SGX-ST. Listing ofthe Units on the SGX-ST does not guarantee a liquid market for the Units.

This presentation is not an offer or sale of the Units in the United States. The Units have not been and will notbe registered under the United States Securities Act of 1933, as amended (the "Securities Act") and may notbe offered or sold in the United States absent registration except pursuant to an exemption from, or in atransaction not subject to, registration under the Securities Act. Any public offering of the Units to be made inthe United States will be made by means of a prospectus that may be obtained from the Manager or SabanaREIT and that will contain detailed information about Sabana REIT, the Manager and its management, as wellas financial statements. Sabana REITdoes not intend to register any portion of the offering in the United Statesor to conduct a public offering of securities in the United States. Accordingly, the Units are being offered andsold outside the United States (including to institutional and other investors in Singapore) in reliance onRegulation S under the Securities Act.

This presentation is not to be distributed or circulated outside of Singapore. Any failure to comply with thisrestriction may constitute a violation of United States securities laws or the laws of any other jurisdiction.

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